Just found out about this one today. This SQLCLR function works right now in CTP4 of SQL Server 2008.

public static Nullable<int> AddTwo(Nullable<int> x, Nullable<int> y)
{ return x+y; }

create function dbo.addtwo (@x int, @y int)
returns int
as
external name asmname.[Mynamespace.Class1].AddTwo;

select dbo.addtwo(2, null);
-> null

Great! Turns out, I suggested this back in 2005...after SQL Server 2005 shipped. And they listened. Actually, going back over the list from 2005... SSMS does display NULL for a NULL UDT already, as of SP1. And large UDTs and UDAggs are also on the agenda for SQL Server 2008.

That may also explain why there's no System.Data.SqlTypes.TimeSpan/DateTimeOffset in Visual Studio Orcas Beta2. They're not needed.